Iowa's casino industry contributes $2.5 billion annually to the state's economy while supporting 16,000 jobs and generating $726 million in tax revenues to local, state and federal governments, according to a study released Thursday.

The study promptly drew fire from an industry critic.

The report, conducted by British-based Oxford Economics, was commissioned by the American Gaming Association, a trade group for the commercial gambling industry. Officials said it's the first time economists have measured the "significant ripple effect" of casinos upon Iowa's supply chain, including local businesses.

Iowa has 18 state-regulated casinos, and a 19th casino is under construction at Jefferson. The report does not include data on three casinos operated by Iowa's American Indian tribes, or statistics about Iowa's horse racing industry.

"This study shows that gaming is driving big results in Iowa," said Geoff Freeman, president and chief executive of the American Gaming Association, in a prepared statement. "However, given increased competition and changing consumer demands, our future depends on strong partnerships with policymakers that allow us to innovate, reinvest and create and more jobs."

Adam Sacks, director of Oxford Economics, said the research reveals a "vast industry" that boosts local communities across Iowa by supporting jobs and generating customers for businesses. "The industry also supports a wide range of government services in the state, especially given the relatively high tax and regulatory requirements that are in place."

Iowa's casinos are collectively the state's biggest tourist attraction, said Wes Ehrecke, president of the Iowa Gaming Association. About 50 percent to 60 percent of Iowa's casino guests are from out-of-state, mostly from surrounding states like Illinois, Wisconsin, Minnesota, South Dakota and Nebraska, he said.

"This report confirms that the gaming industry continues to be a viable part of Iowa's economy at the community and state level and is certainly a valuable part of the entertainment and tourism sector," Ehrecke said.

While it's unfortunate that some Iowans are problem gamblers, Ehrecke said, it's important to recognize that Iowa is a leader in offering state-sponsored gambling treatment and awareness programs through the Iowa Department of Public Health. "But most people can go to a casino for the fun and entertainment it is intended to be," he added.

Iowa gambling critic Tom Coates of Norwalk, who heads a consumer credit counseling agency, dismissed the Oxford Economics study. He said there is no question that positive impacts of casino gambling in Iowa are outweighed by negative social costs, such as divorces, suicides and bankruptcies that force gambling addicts into government welfare programs.

Because the vast majority of gamblers at Iowa casinos are from Iowa or just across the state's borders, they are "redirecting dollars that otherwise would have been spent on other goods and services to the gambling industry," Coates said. "Half of the casinos' revenues are generated from people who could be categorized as problem or pathological gamblers. Since those people are losing disproportionately and in an addicted fashion, they are racking up debts and problems that make them very expensive for the rest of us," he added.

Creighton University economist Ernie Goss, who has extensively researched casino gambling nationally, questioned the benefits of commercial gambling in an economic trends newsletter issued this week. He said that between 2000 and 2012, states with commercial casinos experienced lower gross domestic product growth, 54.8 percent versus 62.6 percent; and inferior job growth, 5.5 percent compared to 8.7 percent, versus states without commercial casinos.

Additionally, states with commercial casinos in 2012 shelled out 15.2 percent of their gross domestic product in the form of transfer and welfare payments, Goss said. This was significantly higher than the 13.8 percent in states without commercial casinos. However, commercial casino states did spend more on education.

"Thus, the most recent data show that commercial casinos did not deliver on the promise of economic development and lower taxes. Instead, commercial casinos appear to restrain growth, increase overall tax burdens and boost welfare and education spending," Gross wrote.

A separate study, prepared earlier this year for the Iowa Racing and Gaming Commission, said the gambling industry supports about 14,000 private-sector jobs statewide and generates about $1.3 billion annually for the state's economy. However, up to 9,000 Iowans have become pathological gamblers and the vast majority aren't getting treatment, said the report by the Strategic Economic Group of West Des Moines and Spectrum Gaming Group of Linwood, N.J.

The state-sponsored report said the casino industry provides optimistic projections of the positive economic impact of proposed casinos. However, more moderate expectations are probably appropriate, researchers said.

The Oxford Economics' report said that without the tax impact of $726 million annually from Iowa's casinos, Iowa households on average would pay an additional $594 in taxes each year. The $726 million is equal to the starting salaries of nearly 22,000 Iowa school teachers, which is $33,226, the report added. The casino industry supports about one of every 91 jobs statewide, the study concluded.

The Oxford Economics' report covered commercial casino revenues and ancillary spending impacts that included spending by casino patrons at leased third-party operations inside the casino, as well as off-site spending by casino patrons during their trips to the casino. The metrics included spending and revenues, jobs and labor income.

Nationwide, casino gambling is an industry with an economic impact of nearly $240 billion annually that supports more than 1.7 million jobs and generates $38 billion in federal, state and local taxes, according to Oxford Economics. The research firm says the United States has 510 commercial casinos and 474 tribal casinos in 39 states.

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Slot machines on the main floor at the Grand Falls Casino Resort located in northwest Iowa.(Photo: Register file photo)